The Jobless Generation: Americans Debate How to Handle Youth Unemployment

By Unemployment-Extension.org | October 8, 2014 at 12:14 AM |

This September, many young people packed up and headed to college or embarked on new careers. Also, an estimated 5.8 million young Americans between the ages of 16 and 24 remained at home, not heading off to work or to school. That translates into a staggering 15% of the youth population between 16 and 24, or about one in six youths.

In a sense, this is nothing new. The youth unemployment rate always tends to be a bit higher than that of the general population. At the height of the Great Recession, in April of 2010, the youth unemployment rate spiked to close to 20%. It’s gone down since then, to the present estimate of roughly 15%. However, youth unemployment has been making waves in recent unemployment news. Many contended that the youth unemployment rates have gotten markedly worse since the Great Recession, and that unemployed youths are suffering for longer, as it becomes harder and harder to find jobs.

Jobless Youth Means Social & Economic Instability

The economic ramifications of youth unemployment can be debilitating. Those who suffer through their twenty’s without a job may never catch up with their peers. Research demonstrates that individuals affected by early stage of career unemployment earn 10 percent to 15 percent less over the course of their lifetime than their contemporaries. Scientists have described them as "wage scars," which can often last upwards of twenty years. “The nearly 1 million young Americans who experienced long-term unemployment during the worst of the recession will lose more than $20 billion in earnings over the next 10 years. This equates to about $22,000 per person,” a study from the Center for American Progress explains.

Furthermore, high youth unemployment means lower tax receipts and higher costs for safety net benefits. Currently, it is estimated that federal and state governments are losing approximately $8.9 billion in revenue each year because of sky-high youth unemployment.

But the bottom line is that youth unemployment isn’t just an economic problem; it is also a social one. Areas with high youth unemployment also suffer from higher poverty rates and greater social anxiety and unrest. Youths without jobs tear at the very fabric of American society. "This is not a group that we can write off. They just need a chance," argues Mark Edwards, executive director of the coalition of businesses, advocacy groups, policy experts and nonprofit organizations dedicated to increasing economic mobility. "The tendency is to see them as lost souls and see them as unsavable. They are not."

Brining Hope to Youths Without Jobs

High youth unemployment rates have begun to turn the heads of many members of congress, including Sen. Bernie Sanders (I-Vt.) and Rep. John Conyers (D-Mich.). In recent unemployment news, Sanders and Conyers have introduced new legislation in order to combat the youth unemployment problem, known as the Employ Young Americans Now Act.

“This is a national emergency that demands immediate federal action,” Conyers explained. “Our economy and society are strongest when our young people enjoy decent opportunity.”

This new legislations provides $5.5 billion in grants to states and local governments in order to help provide job opportunities and job training programs to millions of young Americans. According to a recent press release put out by the Sanders office, the U.S. Department of Labor would provide $4 billion in grants in order to provide summer and year round employment opportunities for low-income youth, while another $1.5 billion in competitive grants would be made available for work-based training.

“This investment will empower young people to improve their lives, while empowering the nation to undertake needed work in healthcare, childcare, construction, and skills development,” Sanders and Conyers explained in a recent press release. “This investment will save taxpayers money over the long run by ensuring the uninterrupted productivity of our workforce and continued growth in consumer demand . . . Tackling youth unemployment isn't just good ethics. It's good economics.”

“High unemployment hits our communities and families hard, and it is particularly devastating for teens and young adults who are denied the opportunity to get the basic job skills they need to go on to college and get a good paying job,” explains Sen. Debbie Stabenow (D-Mich.), who is also a co-sponsor of the Senate bill. “This legislation is an investment in our young adults who just need the chance to prove themselves and get ahead.”

The Debate Rages On

Still, many view the bill has unnecessary, and argue that many youths are actually unemployed by choice. “The larger point is that many college-educated young people are choosing not to take low-paying service-level jobs if they don’t absolutely have to. Because they can live with their parents (and as many as 45 percent of recent grads do) and because they rarely have much in the way of fixed costs such as homes and children, they can hold out for a job that matches their ambitions,” Zachary Karabell, the Head of financial services firm Global Strategy at Envestnet, contended in an Atlantic column last year. “This type of unemployment is one of choice—rational, legitimate choice—not of systemic failure.”

However, many find it hard to believe that the high youth unemployment rate is being driven by young people who have chosen not to take jobs, especially considering that in some communities the youth unemployment rate is actually over 30 percent. The African-American youth unemployment rate, for example, is a staggering 32.8 percent. And many young Americans who do have jumps are actually under-employed—meaning that they are stuck in jobs that don’t match their skill sets or that only employ them part time.

It remains clear that the issue is complex, influenced by a number of different factors. Only time will tell, however, whether or not the new legislation makes it through Congress. For the latest on the legislation, stay tuned to recent unemployment news.